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No one will deny that the latest generation of budgeting and planning (B&P) software is capable of doing great things. These Web-enabled systems are designed to help companies radically speed up the planning process, even as they allow many more people to participate. They import data points with ease, whether from within an organization or without. They keep managers apprised of who has filed a budget and who has not, and how closely various departments are sticking to plan.

But there’s one thing that even the newest B&P systems can’t do: make employees use them.

In fact, the last thing many workers want is more involvement in the budgeting and planning process — too often a four-to-eight-month exercise in disillusionment, marked by back-and-forth reviews, back-room negotiations, “land-grabs,” and gaming to manipulate forecasts. “People hate budgeting because they think, ‘There’s nothing in it for me,’ ” says Lawrence Serven, a principal in Buttonwood Group LLP, a Stamford, Connecticut-based management consulting firm specializing in developing planning solutions. “Or there’s a sense of futility, that management is going to slash the numbers anyway. Or they don’t even hear back from management on what was approved and what wasn’t.”

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Couple this aversion to the process with the ubiquitous resistance to change, and B&P software implementations become an enormous challenge for all but the most enlightened organizations. Indeed, half of the companies surveyed by CFO magazine said that half their purchased seats go unused or underused — a sizable proportion, even considering that companies may buy bigger-than-needed licenses to accommodate user growth.

“Technology will support a culture change,” concedes Chris Leone, vice president of product marketing for applications at B&P bellwether Hyperion Solutions Corp., in Sunnyvale, California, “but it can’t create a change.”

Pockets of Resistance

Resistance to change is by far the biggest impediment to widespread adoption of B&P software. Most companies rely on some combination of Excel, E-mail, and paper for budgeting, and many users aren’t eager to have their comfort levels challenged.

At BankAtlantic FSB in Fort Lauderdale, Timothy Cooke wasn’t surprised to encounter some resistance to the installation last year of an SRC Software B&P system. The bank’s staff includes some 30-year veterans, says Cooke, manager of financial systems. “We’re not talking about technically sophisticated people. They know their jobs well, but they don’t want to mess with new software packages or learn any new software,” he says.

When the San Diego Unified Port District implemented Comshare B&P software in January 2000, budget administrator Robert Graves says he encountered pockets of resistance among senior management who were used to completing their five-month-long review of the budget entirely on paper. “No one likes change unless they can see a tremendous benefit for themselves, and a few people just didn’t want to change,” says Graves. “They didn’t want to do things online. They like paper.”

Sometimes the resistance is more than cultural. At Silicon Graphics Inc., in Mountain View, California, the rollout of Oracle’s Financial Analyzer and Closedloop Solutions’s TopLine Manager was straightforward in the United States and the Asia-Pacific region, according to Jeff Osorio, vice president of finance operations. But the European rollout was far more difficult. “I think it was a ‘not invented here’ sort of cultural thing,” says Osorio. “And part of it was that [Europe] previously felt autonomous from the U.S. division, and we had had no visibility into their operations. Now we can see everything that’s going on, and they don’t like that too much.” As a result, some European staffers aren’t refusing to use the software, he says, “they’re just claiming that it doesn’t work.”

While such resistance might sound like a minor obstacle to a successful implementation, in many cases it can have a powerful negative impact on the cost/benefit of the software. B&P software and implementations aren’t cheap — $1,600 per seat, says AMR Research — and if 25 percent of the purchased seats are unused or underused, that’s money down the drain. What’s more, a large part of the financial rationale for B&P software is its timesaving potential, but the budgeting and planning process, which depends on input from many people, is only as fast as its slowest link — no matter how automated.

“Most of our process didn’t speed up” after B&P software was implemented, says Graves. “Most of what we do [for budgeting and planning] is still the human side — the reviews of requests, arguing about it. But now, once we get the figures, we can turn [the budget] around quickly.” The Unified Port District has been able to shave about a month off its budget cycle with the Comshare system, and Graves expects to cut even more as the district starts using more of the system’s functions.

Aiming to Please

Getting employees to embrace a new B&P system can put more strain on an already-stressful process, which usually takes 12 months or less, according to CFO’s survey. Experts say the best way to overcome user objections is to prevent them in the first place. How? By surveying all potential user groups and incorporating their informational, technical, and operational requirements in the software selection process.

When Rich Lindsay, CFO of Boston Beer Co., was selecting a new budgeting and planning program for the company, he knew that the most important user group would be salespeople at the regional manager level, whose sales forecasts drive almost all other budget calculations throughout the organization. “The salespeople wanted the feeling of owning their own business,” says Lindsay. “But at the end of the day, they want to sell beer, not fill out spreadsheets.” As a result, one important must-have for Boston Beer’s B&P system was a simple interface that wouldn’t require much data entry.

Another key issue was determining how the consolidated sales forecasts would be aggregated in the new system. Operations and corporate wanted data compiled on a regional basis; salespeople wanted it on an SKU and account level. Again, because the salespeople would be the key users, their needs took precedence, at least at first.

“We want to move it to a more consolidated, market-based level at some point, but we’re starting out this way,” says Lindsay. Boston Beer eventually chose a Hyperion planning system with a simple spreadsheet format based on the Excel system the salespeople were already using. “The sales force has to compromise the most in terms of changing their day-to-day processes whenever we roll out a new system, so that’s why we’re doing it this way,” says Lindsay.

Not everyone is comfortable with the spreadsheet front end that many budgeting software packages employ, but since finance usually selects the B&P package, that’s usually what everyone gets, notes consultant Serven. A number of software vendors offer user interfaces that can be customized based on the needs or responsibilities of individual users, but that too takes additional time and money. As a result, most B&P rollouts involve one-size-fits-all interfaces, says Serven.

Training Is Tops

That being the case, the most important factor in smooth implementations, say those who have done them, is training.

When Silicon Graphics’s Osorio started getting calls from European staffers claiming that the new software didn’t work, he realized that the software wasn’t the problem. If someone claimed the data in the data warehouse (which was used to populate the budgeting system) was incorrect, “I’d explain that the data was consolidated directly from our actual order transaction system,” he says. “There was no way it was wrong.” Or when an employee complained that the system ran too slowly, “we did testing and proved that that wasn’t the case, either.” And when staffers said there wasn’t enough training, additional training was scheduled.

“You have to listen to the issues,” says Osorio, “acknowledge them, then knock them off the list one by one.” When he came across particularly stiff resistance from Europe, “that’s when you send someone over on a plane and work with them until it’s resolved.” “A lot of software applications say you can do training remotely,” adds Osorio, “but there’s no substitute for face-to-face relationship-building.”

Graves of the San Diego Unified Port District agrees. He coordinated training classes, dispatched budget staff members to help people one-on-one in their offices, and listened to user feedback. “During the classes, some criticisms of the program came up,” he says. “We implemented changes based on those comments.”

Not that the implementation process was a piece of cake. “Like most budget and IT staffs, we aren’t staffed to the levels we’d like to be,” says Graves. “We put in a lot of overtime.” Still, the process went well, and except for one senior manager who continues to do budgeting on paper, the system has been fully rolled out.

Bottom-Up Lowdown

The ultimate benefit of the latest Web-based B&P software, say vendors, is fuller employee participation, so that budgets become more “bottom up,” deriving forecasts from those who know the market best. This has been the case at Advantage Sales and Marketing LLC, a member-owned company based in Irvine, California, where 500 associates out of 11,000 are using a Comshare MPC system, both to participate in the budgeting and planning process and to get real-time metrics to track departmental performance. Bob Vesely, CFO of Advantage, which handles sales and marketing for consumer packaged-goods companies, expects the user numbers to “double or triple” in the next year.

A year ago, the company started uploading data nightly from its order-management system to the Comshare program. “All of a sudden, the department managers and sales personnel who do static budgets twice a year have actual data to compare against those budgets,” says Vesely. “Once you start putting live data in there, you’ve got very interested people.” The system has also freed up finance people who, before the software, would screen paper budget requests and manually input them into a spreadsheet. Now, many of the responsible associates do that work themselves.

Other finance executives say that while greater employee participation is a noble idea, it probably won’t play out as envisioned. “You can attempt to empower the people at the line units,” says Cooke at BankAtlantic, “and people who know what’s going on at a roots level. But ultimately, if the numbers aren’t compatible with what the chairman and board feel the budget should be, something has to change. And it’s not going to be the chairman.”

Michael Collins, vice president of operations at Chicago-based McCord Travel Management, says his company embraces the ability to get better forecasting data (via Hyperion Pillar B&P and Performance Scorecard systems) from salespeople in the field who are tuned in to their local markets. But McCord reserves the right to limit employee contributions to the budget process on macro revenue projection issues.

Says Collins: “You must be prepared to accept that opening up this process to smart people who are making a good case can lead to two or three additional review passes of the budget. We have to strike a balance.” He has seen line managers challenge data that had been “prepopulated and locked” in the budget template, validating their participation and contributions.

“At the end of the day, having more people on the system makes it richer,” says Collins. “And that wouldn’t be feasible without Web-based software. The point of doing this is to let people know how the process works, not to grant them a real material effect on the budget.”

Finding the fulcrum between knowledge and influence may be the key to getting employees to embrace a B&P system and use it well.

“Knowing that you’re involved in something bigger than yourself can be a really motivating force,” says Serven. “If I know where my company is going, and I can see how I fit into the bigger picture, I am going to be more motivated to deliver what I need to deliver.”